Hwang, who previously worked at the Ministry of Finance, made the statement at his swearing-in ceremony.

“TAMC, created to help domestic banks digest non-performing loans, will seek to diversify its sources of income as the operating environment becomes increasingly difficult,” Hwang said.

The average bad loan ratio for the nation’s 37 banks dropped to 0.56 percent at the end of November, increasing pressure to auction off collateral, the main operation of TAMC, he said.

The company, in which the government controls an 81.46 percent stake, must change in order to remain viable, Hwang added.

Toward that end, TAMC will purchase toxic assets and hold on to real estate in popular locations and renovate properties so they could generate rental yields and create job opportunities, Hwang said.

Last year, the company partnered with a hotel and restaurant operator to turn an idle building in Taitung County into a four-star hotel.

Under the joint venture, TAMC and Honeymoon Four Seasons Co (蜜月四季餐旅購) are to spend NT$300 million (US$10.3 million) and NT$180 million respectively to transform a 10-story building into a resort hotel in Chihpen, Taitung.

The hotel, tentatively named the Century Hotel (金聯世紀大飯店), is expected to generate 7.5 percent in rental yields a year and provide 500 jobs for the local community, TAMC said.

Meanwhile, TAMC will divest properties in remote and less attractive locations to strengthen its working capital, Hwang said.

The company also will help advance government policies, such as the provision of affordable housing, by selling and leasing collateralized properties at fair rates, Hwang said.

Despite growing competition from private financial institutions, TAMC maintains its leadership position in the local market, he said.